OPEC output is the highest since 2012

West Texas Intermediate for January delivery was at $36.68 a barrel on the New York Mercantile Exchange, down 8 cents, at 9:24 a.m. Seoul time.

The Paris-based agency delivered more bad news to battered oil producers, who have seen prices slump below $40 (U.S.) per barrel and hit their lowest point since the deep global recession of 2008-09.

Oil prices have tumbled to near-seven-year lows below $40 per barrel in December after OPEC failed to impose a ceiling on its output.

The Organisation of Petroleum Exporting Countries (OPEC) on Thursday estimated a contraction of 380,000 barrels per day (bbl/d) in non-OPEC supply which is set to average 57.14m bbl/d in 2016, a downward revision of 250,000 bbl/d from its previous estimate.

Mr Gorry said he expected a slow rebalancing of the market towards the end of next year, with production remaining stubbornly high despite low benchmark prices.

The mighty oil cartel produced 31.7 million barrels a day in November, its latest monthly report shows. Production rose to a three-year high in November, the group said in a report yesterday, as surging Iraqi volumes more than offset a pullback by Saudi Arabia.

With slightly stronger growth in the USA and lower-than-expected growth in Japan in third quarter of 2015, the OECD growth forecast remains at two percent for 2015 and 2.1 percent for 2016. It reached a peak of almost $108 per barrel in June 2014.

China’s yuan has also fallen to its lowest in 4-1/2 years on concerns about the country’s slowing economy and expectations of a United States rate hike.

With U.S. output starting to fade, OPEC left policies more or less in place during last week’s regular meeting in Vienna. “As companies make further spending cuts in reaction to sub-$50/bbl oil, the impact on supplies – both from non-OPEC and OPEC – will be even more pronounced in the longer term”, the agency said. In 2016 the demand will increase by 1.25 million bpd up to 94.13 million barrels.

Earlier this week, the US Energy Information Administration forecast that US shale oil production, now a major source of oil supply, would fall in January for the ninth month in a row.